Making money from stoozing

kimwp
kimwp Posts: 1,782 Forumite
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in Stoozing: free cash from credit cards
I'm pondering stoozing and it would be really helpful if someone could check my numbers to see if I've understood it correctly.


I should spend as normal, but on a 0% credit card, paying the monthly minimum, putting the cash I then "save" into a savings account and paying off the full amount just before the end of the 0% term. At the highest regular savings rate of 2.75%, a £300 monthly credit card spend would generate approx. £50 per year?


I initially thought that the idea was to keep building a stoozing pot by using 0% balance transfers, but it looks like these have transfer fees higher than the savings accounts interest rates so that wouldn't make sense?


Am I missing anything?
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Comments

  • GOTfan
    GOTfan Posts: 7 Forumite
    The transfer fees can be "higher" than the annual savings rate, but remember that in most cases the 0% period is for longer than 12 months - a good deal is often say 3 years. So you'll be "in loss" at first but over the 3 years make a profit. Also, if you are offsetting against a mortgage then the "saving" rate is whatever your mortgage rate is (I'm in the last throes of my mortgage so it's drifting along at 3.75%, for example, as it's not worth changing now. So for me, it's worthwhile).
  • Ben8282
    Ben8282 Posts: 4,821 Forumite
    Combo Breaker First Post Newshound!
    Please let us know which regular savings account offers 2.75% interest.
  • quirkydeptless
    quirkydeptless Posts: 1,219 Forumite
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    Ben8282 wrote: »
    Please let us know which regular savings account offers 2.75% interest.

    HSBC, M&S and First Direct, but you need an appropriate current account with them to have it.
    Retired 1st July 2021.
    This is not investment advice.
    Your money may go "down and up and down and up and down and up and down ... down and up and down and up and down and up and down ... I got all tricked up and came up to this thing, lookin' so fire hot, a twenty out of ten..."
  • ChrisJ1988
    ChrisJ1988 Posts: 60 Forumite
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    If you like a bit of risk in your life you could invest the 300 a month in the stock market and potentially make an absolute fortune.
  • kimwp
    kimwp Posts: 1,782 Forumite
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    @GOTfan - Unfortunately I don't have an offset mortgage, but likewise in the last throes, yippee! Good point about the 0% interest rate being over several years, it does rely on the savings rates staying above an average minimum whereas the loss is upfront, but there might be fixes to minimise the risk. Good points to ponder - thank you!


    @quirkydeptless - cheers!


    @ChrisJ1988 - I don't do stocks with money I have (except pension, I guess!), let alone money I'm borrowing! Thank you for the suggestion though :)
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  • adindas
    adindas Posts: 6,813 Forumite
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    edited 21 January 2020 at 7:39PM
    ChrisJ1988 wrote: »
    If you like a bit of risk in your life you could invest the 300 a month in the stock market and potentially make an absolute fortune.

    Stoozing and investing does not go hand in hand.

    - Stoozing is risk free Investing in the stock market is not. If you go further to investing in stock market then what you are actually doing is investing in the stock market using stoozed money.

    - Stoozing is short term, Investing in the stock market is long term.

    - "Potentially make an absolute fortune? " well, Share go up and down, not absolute. You might be making a lost when you need to cash it in the bear market.

    - And what happen if the bank ask you to return the money in quite short notice ??

    The general view of investing is that, You invest the money you could effort to lose. Stoozing Money is the bank money, not your money.
  • kimwp
    kimwp Posts: 1,782 Forumite
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    How do I find out how much I could borrow? It doesn't seem to say anywhere?


    Also concerned about your comment adindas regarding the bank asking for the money to be returned with a short notice - could they ask for it back sooner than the 0% period? (Just thinking re 2 year fixed period savings accounts)
    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • ChrisJ1988
    ChrisJ1988 Posts: 60 Forumite
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    No, they never ask for it back early He is throwing around the usual scaremongering that goes on in these forums.

    Bank interest rates are chump change, enjoy your £50 a year while someone else invests YOUR money in the stock market living the high life. you aint ever gonna get ahead doing the same thing as everyone else.

    You can be a sucker all your life paying for the high rollers or stand up and be counted.
  • stehouk
    stehouk Posts: 412 Forumite
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    edited 21 January 2020 at 2:28PM
    kimwp wrote: »
    How do I find out how much I could borrow? It doesn't seem to say anywhere?


    Also concerned about your comment adindas regarding the bank asking for the money to be returned with a short notice - could they ask for it back sooner than the 0% period? (Just thinking re 2 year fixed period savings accounts)

    I wouldn't worry about them asking for it to be repaid early as long as you abide by the t&c's and don't miss the minimum repayments as for how much you can borrow, no one can tell you that as it depends on your'e personal circumstances, virgin are quite generous as are halifax but that is from my experience and personal circumstances.

    The stock market requires a lot of research and is not for the short term.
  • Ben8282
    Ben8282 Posts: 4,821 Forumite
    Combo Breaker First Post Newshound!
    edited 22 January 2020 at 3:10AM
    There is nothing wrong with stoozing as such and in times of high interest rates it can obviously be quite profitable. However, with today's low interest rates, the amount of money that can be made is somewhat less.
    It is obviously up to the individual concerned if it is worth bothering. Certainly if any individual has any interest bearing debt (except a mortgage) it would be better to repay the debts and stop paying interest than to stooze to obtain interest which will almost certainly be less than any interest being charged.
    Then it needs to be considered if the time and effort involved is worth it for the amount of money to be made.
    There is also the question of the balances which will appear on the stoozers credit cards and what effect these balances could have on the individuals ability to obtain further credit while stoozing, should any such credit be required.
    kimwp wrote: »
    How do I find out how much I could borrow? It doesn't seem to say anywhere?


    Also concerned about your comment adindas regarding the bank asking for the money to be returned with a short notice - could they ask for it back sooner than the 0% period? (Just thinking re 2 year fixed period savings accounts)
    They won't ask for it back early unless you breach the terms and conditions of the promotional offer such as exceeding the credit limit or failing to make the minimum repayment each month.
    You mention fixed 2 year savings accounts. Now to get the entire amount in order to pay it in to the account and leave it there for 2 years, you would need the full amount upfront so a purchases card would not be suitable for this. Secondly, you would need a promotional period in excess of 24 months to allow time to get the money, pay it in to the fixed term account, leave it there for the full term, withdraw it and repay the credit card prior to the expiry of the 0% offer. This would require a money transfer which will almost certainly involve payment of a fee. There could be another possibility of using a card with a no fee interest paying money transfer offer then almost immediately repaying this from a no-fee balance transfer card.
    With a purchases card, you can only put into a savings account the amount that you have saved from each month's purchases, so you would need an account into which further deposits can be made at any time.
    If any fees whatsoever are involved, you need to consider the fee, and length of 0% offer against the interest that you will receive (on which you may have to pay tax) and ask yourself just how much you will actually make and is it really worth it to you
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